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Re: News Release - Friday, May 30, 2008
U.S. Silver Achieves Profit in First Quarter 2008 Financial
Results
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May 30, 2008 - Toronto, Ontario - U.S. Silver Corporation (USA-TSXV)
("U.S. Silver" or the "Company") is pleased to announce its
consolidated financial results for the first quarter ended March 31,
2008. The consolidated financial statements and Management's Discussion
and Analysis ("MD&A") have been filed on SEDAR and can be viewed under
the Company's profile at www.sedar.com.
Highlights and Milestones of First Quarter 2008
- Achieved first quarterly profit as a public company of nearly $1
million
- Production of approximately 352,000 oz of Silver, up 24% from fourth
quarter 2007
- Revenues of over $7.3 million
- Increased daily production in first quarter to 558 tons, an increase
of more than 69% compared to the average daily volume in all of 2007
- Increased proven and probable reserves by 61% to over 17 million oz
of Silver
- Galena Shaft repair progresses on schedule, with completion expected
in late 2008
- Completed over 20,900 ft of development and exploration drilling
- Completed over 2,900 ft of underground development activity
- Total workforce has increased by 102% since Q107
First Quarter 2008 Financial Results
The Company recorded revenues of $7.3 million (vs. $4.2 million in the
period ending March 31, 2007 ("Q107")) and earned its first quarterly
profit since 2006 with net income, before taxes, of $1.0 million.
Revenues for the period were higher than last year primarily due to
higher metals prices and higher production volumes. The Company
continued to focus its resources on infrastructure improvements,
employee training, and resource development while increasing production
levels. The turnaround at these operations will continue through 2008,
with both tonnage and grade improving because of numerous initiatives
started nearly two years ago.
Operating expenses for the three-month period ended March 31, 2008
("Q108") increased $1.9 million from the $5.5 million incurred in Q107.
The increase in expenses was due to an increase in production tonnage
of nearly 80% as compared to the prior year. Q108 operating expenses
consisted primarily of $6.4 million in mining costs, $0.7 million in
general and administrative expense (higher than in Q107 as the
corporate structure was setup and staffed over the course of 2007), and
exploration costs of $0.5 million vs. $0.2 million in Q107. The
elevated level of exploration costs can be expected to continue as the
Company seeks to continuously build its reserves and resources with the
aim of enhancing shareholder value.
The Company has no long-term debt and had over $19 million in cash and
equivalents at the end of Q108.
Operational Update - Analysis of First Quarter 2008
The Company continues to operate two concentrators with the Coeur mill
processing the silverlead ores produced at the Galena mine and the
silver-copper ores being processed at the Galena mill. The Coeur mill
operated at a rate 218 tons per day ("tpd") during the quarter and is
expected to operate at a rate of approximately 400 tpd by the fourth
quarter of 2008. Aggressive development and exploration of the
potentially large silver-lead resource continued with mining activity
of the silver-lead ores currently focused on the 3000 and 3700 levels.
Exploration and development of the silver-lead ores during the quarter
continued on the 2400, 3000, 3700, 4000, and 5200 levels of the Galena
mine.
Development activities were focused on the exploration and development
of the numerous areas where silver-lead ores were identified in
historic workings or through the intensive exploration program begun
after the acquisition of the mine. The Coeur mill was restarted to
process these silver-lead ores in November 2007. Ore is now hoisted and
milled at a rate of about 200 tons per day at the Coeur facility
located about a mile and a half west of the Galena mine.
The Company continues to process the silver-copper ores at the Galena
mill with production of silver-copper ores having come from the 3400,
3700, 4000, 4600 and 4900 levels of the Galena mine. Development of new
orebodies has continued throughout the quarter with emphasis on newly
discovered mineralization on the 2400 and 4600 levels. An additional
development on the 4900 level is being drifted into a 55 ounce per ton
ore reserve. The 2400, 4600 and 4900 developments are designed to
utilize efficient mechanized mining equipment. The Galena mill operated
at an average rate of 340 tpd during the quarter but is expected to
produce at a rate of 700 tons per day by the fourth quarter 2008.
Additionally, the idle second flotation circuit in the Galena mill is
being repaired and should provide an increase in the production
capacity of the mill to over 1000 tons per day by early 2009.
Total production volumes continue to be lower than forecast as a result
of the significant shortage of skilled workers and the higher than
expected level of resources required for the extensive infrastructure
repairs. The result has been weaker revenue growth. Cost increases were
higher than expected as a result of a number of factors, including
extensive underground development and infrastructure repairs. The
Company continues to invest in capital improvements and exploration at
the Galena mine complex with approximately $6.7 million spent in the
first quarter. On-going capital projects include the reconstruction of
the Galena shaft and other critical infrastructure, exploration
activities, and rehabilitation and development activities in several
underground locations. Development and infrastructure repair accounted
for more than 60% of the capital spent on the mine during the first
quarter of 2008.
Over the course of the last six months, the output of silver-copper ore
has been increased such that the Galena is currently (at the date of
this press release) operating at about 550 tons per day. Management
expects production of approximately 700 tons of silver-copper ore per
day to be achieved by the fourth quarter of 2008.
Total production from both ore types, at the time of writing, is around
750 tons per day with monthly silver production at approximately
140,000 ounces. Total production levels are anticipated to reach
approximately 1000 tons per day in the fourth quarter 2008.
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Production Statistics Q1 07 Q2 07 Q3 07 Q4 07 Q1 08
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Total tonnage 19,858 19,234 18,852 27,107 35,724
Tons per day 310 300 299 444 558
Total ounces Ag 328,984 302,188 265,547 283,423 352,246
Ounces per day 5,140 4,722 4,215 4,646 5,510
Total copper production - lbs 211,382 319,964 184,965 160,665 178,269
Total lead production - lbs N/A N/A N/A 451,163 822,634
Cash costs $10.16 $10.63 $12.62 $14.69 $12.10
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Staffing levels have increased dramatically over the last 12 months. In
March 2007, the Galena operations employed a total of 136 people,
including surface staff and contractors. On March 31, 2007, over 210
people were employed at the operation as well as approximately 65
contractors.
The long-term historical silver grades for the Galena Mine
silver-copper ores were over 20 ounces per ton. These grades had
declined significantly in the several years prior to mid 2006 to below
10 ounces per ton. Currently, ore grades continue to be temporarily
impacted by the high levels of development ore being processed in the
mill. As the developments are completed and the stopes begin normal
mining operations, ore grades are expected to improve. The
re-activation of the Galena shaft and establishing new development
practices will have a positive impact by allowing access to
higher-grade ore.
ABOUT U.S. SILVER CORPORATION
U.S. Silver, through its wholly owned subsidiaries, owns and operates
the Galena, Coeur, and Caladay silver-lead-copper mines in Shoshone
County, Idaho, with the Galena mine being the second most prolific
silver producer in U.S. history. Total silver production from U.S.
Silver's mining complex has exceeded 210 million ounces of silver
production since 1953. U.S. Silver controls a land package now totaling
approximately 18,000 acres in the heart of the Coeur d'Alene Mining
District. U.S. Silver is focused on expanding its production from
existing operations as well as exploring and developing its extensive
Silver Valley holdings.
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release.
Certain information in this press release may contain forward-looking
statements. This information is based on current expectations that are
subject to significant risks and uncertainties that are difficult to
predict. Actual results might differ materially from results suggested
in any forward-looking statements. The Company assumes no obligation to
update the forward-looking statements, or to update the reasons why
actual results could differ from those reflected in the forward
looking-statements unless and until required by securities laws
applicable to the Company. Additional information identifying risks and
uncertainties is contained in filings by the Company with the Canadian
securities regulators, which filings are available at www.sedar.com.
FOR FURTHER INFORMATION PLEASE CONTACT:
U.S. Silver Corporation
Bruce Reid
Chief Executive Officer
(416) 848-0858
or
Vance Loeber
Investor Relations
(604) 805-3530
or visit:
www.us-silver.com
View News Release in PDF Format:
http://www.us-silver.com/i/pdf/2008-05-30_NR.pdf
190 KB in size, approx. 36 seconds to download at 56.6Kbps
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Copyright (c) 2008 US SILVER CORPORATION (USA) All rights reserved.
For more information visit our website at http://www.us-silver.com/ or
send mailto:hfairhurst@us-silver.com
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